St. Louis Fed Updates Key Q3 2025 Corporate Profit and Dividend Metrics
St. Louis, Tuesday, 30 December 2025.
The St. Louis Fed’s latest release finalizes Q3 2025 corporate profit figures, offering a critical, adjusted benchmark of US business health ahead of the fourth-quarter earnings season.
Understanding the Adjusted Metrics
The Federal Reserve Bank of St. Louis has updated its repository to include the Bureau of Economic Analysis (BEA) data for the third quarter of 2025 [1][2]. This release distinguishes between two critical measures of corporate performance: corporate profits after tax without adjustments [2], and the more comprehensive metric that incorporates Inventory Valuation Adjustment (IVA) and Capital Consumption Adjustment (CCAdj) [3]. The inclusion of IVA and CCAdj is significant for analysts because it strips away nominal gains resulting from inventory price changes and corrects for discrepancies between tax-return depreciation and economic depreciation [GPT]. By focusing on the adjusted figures, specifically the series tracking Net Dividends and profits after tax, economists gain a clearer picture of the capital actually available to firms for reinvestment or distribution as the 2025 fiscal year concludes [1][3].
Analyzing Profit Peaks and Recession Signals
As of December 2025, analytical models suggest that nonfinancial corporate profits have apparently peaked [4]. In historical economic cycles, a peak in corporate profits typically precedes a peak in the broader business cycle, often signaling an approaching recession [4]. However, financial experts caution against viewing this current peak as an immediate alarm bell. Analysis indicates that the lag time between a profit peak and a business cycle peak is highly variable, making it an unreliable standalone predictor for imminent economic downturns [4]. Furthermore, the unique economic distortions lingering from the post-pandemic era suggest that traditional lag correlations may be less applicable in the current environment [4].
Monetary Context and Market Operations
While the profit data offers a retrospective look at the third quarter, the Federal Reserve’s operations through the end of the year have continued to shape the monetary landscape. On December 10, 2025, the Federal Open Market Committee (FOMC) issued an Implementation Note regarding its policy stance [5]. Throughout late 2025, the Federal Reserve has managed the effective federal funds rate within targeted limits, despite fluctuations in the tri-party general collateral rate (TGCR) [5]. These fluctuations have been attributed partly to the gradual reduction of Treasury securities held on the Federal Reserve System’s balance sheet [5]. For corporate treasurers and investors, understanding this backdrop of tightening liquidity is essential when interpreting the sustainability of the dividend flows reported in the Q3 data [1][5].